I bought property at HOA auction.....looking for advice !!!

Foreclosures
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I bought property at HOA auction.....looking for advice !!!

Greg M.
Wholesaler · Charlotte, NC · Member since 2012 · 3 posts · 0 votes

I started renting the home my family and I presently live in 5 years ago.Never being late on a payment I started getting forms delivered to my house that stated an auction was to be held for the property.I notified the homeowner and he assured me that this was not a problem and not to worry.After this happened a second time I got a bit curious and made made plans to be in court on the date that the forms provided.To make a long story short, the auction was for a HOA foreclosure.It would have cost my family and I way more money (almost double)to move than what the starting bid was......so I bid,and won the bid!!!! Ten days later the deed was recorded in my name.Now I assumed that all other leins had to be satisfied so that's what I did,except for one that constantly refuses to talk with me....BofA!!!! So far I have been to court (foreclosure) and the judge was even confused as far as what to do about the case,so it was poseponed.She had the strangest look on her face when I showed her my deed showing that I had purchased the property.So far I have contacted quite a few lawyers and no one has a clue of what to do.I am not looking for anything free,I just wanted to save my family .Now I just want to pay for the thing so we can live in peace.Can anyone please help?

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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y

I would suggest you begin looking for financing to payoff BoA. You aren't on the note so they aren't talking to you. You should probably talk to BoA about a new loan and tell a mortgage loan officer what the problem is and they will work on it internally from there. You'll need to clear liens having priority, so as Jon mentioned, get title work done, but if you apply for a new loan that will be taken care of through the bank.

I'm surprised the judge was flabergasted and attorneys are stumped.

Under state laws there, is there a redemption period for these liens, if so you'll need to wait. I suggest you go back tothat judge and ask the court to place a stay on the matter so that no action can be taken for a period of time for you to obtain financing to payoff the liens and order BoA and any other lien holder to provide information for payoffs.

Like Jon said, keep looking for another attorney, but at the same time, going to a mortgage office at BoA and applying for a loan should get them started. I'd also look for other financing as I avoid BoA, just don't like dealing with them.......good luck.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    You need to find a different lawyer. Sorry, but the right one will understand how this works.

    Have you had a title company do a title search on the property? And this BofA lien is the only one that's still on the property? Have they started foreclosure proceedings? Perhaps a title company can recommend a lawyer who actually understands how the law works in NC.

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    I would suggest you begin looking for financing to payoff BoA. You aren't on the note so they aren't talking to you. You should probably talk to BoA about a new loan and tell a mortgage loan officer what the problem is and they will work on it internally from there. You'll need to clear liens having priority, so as Jon mentioned, get title work done, but if you apply for a new loan that will be taken care of through the bank.

    I'm surprised the judge was flabergasted and attorneys are stumped.

    Under state laws there, is there a redemption period for these liens, if so you'll need to wait. I suggest you go back tothat judge and ask the court to place a stay on the matter so that no action can be taken for a period of time for you to obtain financing to payoff the liens and order BoA and any other lien holder to provide information for payoffs.

    Like Jon said, keep looking for another attorney, but at the same time, going to a mortgage office at BoA and applying for a loan should get them started. I'd also look for other financing as I avoid BoA, just don't like dealing with them.......good luck.

    2Reply
  • Keith Lutz
    Real Estate Agent · Hackettstown, NJ · Member since 2011 · 206 posts · 62 votes
    14y

    I am going to assume they were not Real Estate Attorneys and that there practice was some other extension of the law. If you need help picking one this site might help - http://www.avvo.com/

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    The BoA loan belongs to your landlord that you originally rented from, correct? If so, then you can attempt to get that landlord to fill out a form called "Authorization to Release Information" that authorizes you to speak with BoA regarding the outstanding loan.

    You can even try to do what is called a "Subject To" transaction with the landlord, where you take over the payments on the loan.

    It sounds like that's what you are wanting to do ...

    I think where the legal eagles are having trouble is this: are you a tenant at foreclosure - or are you a new owner after foreclosure - since you are both ... Tenants have certain rights after foreclosure, new owners get other rights after foreclosure - do you get to have both!

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    The way I read it was he won at the HOA and BoA was forclosing and that' he showed up in court. As if they had if they had foreclosed on the wrong owner...???? I can head scratching over that.....

    Steve makes a great point that you could buy subject to, but that won't stop BoA from calling it due or foreclosing.....

    Tenants who have a valid lease can stay to the end of the lease term or up to 6 months under an existing lease, which ever is shorter with a lender foreclosing.

    Clarification????

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  • Greg M.
    OP
    Wholesaler · Charlotte, NC · Member since 2012 · 3 posts · 0 votes
    14y

    Steve, yes I have tried contacting the original owner. Unfortunately he's unwilling to cooperate. Also I've spoken with 4 more different real estate lawyers so far today, and they all state that this is something they have never done so they would not be able to help.Very strange .....

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  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    Greg Minor, was BoA foreclosing? Is that was postponed?

    What made you go to court, what was the matter before the court?

    I can understand the landlord not talking to you after buying his lien...

    Whose on first, can you phrase the situation again please?

    Stranger things have happend, I assure you......LOL

    Sounds too like the attorney doesn't think it's worth their time to find out what to do..... did you speak to a title attorney, like at a title company?

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  • Jeff S.
    Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
    14y

    You asked for help, Greg Minor, but are not forthcoming with your problem. It’s extremely unlikely you’re plowing new legal ground, which is causing everyone to speculate and ask for clarification.

    What specifically, is the problem you’re asking all of these attorney’s to solve?

    We know you’re new here. Help us help you.

    0Reply
  • Tom Pemberton
    Member since 2010 · 2 posts · 1 vote
    14y

    New poster, but professional lurker. REO broker in Ma and in Ma we have a " Super Condo Law", which basically states that any back condo fees due, they take precedent over any and all mortgages. They have to notify any lien holders, just like with a lender. The lender usually catches up the back fees once notified. If this is the case in NC, good for you you got a score. What concerns me is that no RE atty's and a judge have no idea what's going on. BTW, I hate scumbag landlords that collect rents and don't pay their mortgage. I have to knock on tenants doors all the time and the look on their faces, is heart wrenching.

    1Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    14y

    Welcome to the trenches Tom, that's rather a rather unusual priority but looks like the lender was asleep anyway, I'd love to see it go down like that.....I doubt NC is as liberal and protective of as Ma. I have no idea what NC does, just assuming, but we still don't have any clarifications.....maybe the OP had to go to work or something, we all can't sit around on line in our underware all day!

    In fact. I'm leaving in a bit.....LOL

    1Reply
  • Tom Pemberton
    Member since 2010 · 2 posts · 1 vote
    14y

    Thanks Bill. I am LMAO, while typing this response. Most RE Broker's make their $$$ on the road, I just get fat siting at my computer almost all day putting out fires. Ma has some screwed up laws, but I like this one, basically u snooze u lose.

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  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    14y

    Actually, its similar here in CO. Unless its changed recently. Some amount of HOA dues go in ahead of the mortgages. Not necessarily all of the dues, so the HOA dues can end up split into two parts, one slice ahead of the mortgages and the rest behind. If the HOA forecloses, the mortgage would be just like any other junior lienholder. They have the right to redeem. That's very quick here, 11 business days, IIRC. If they don't, they're wiped out. I have no idea how this works, exactly, in NC, though. Someone does, though.

    One option is to do nothing. You own the property, Greg Minor. If a lienholder does have any ability to foreclose, they will eventually have to deal with you. You're not on the hook for any of the loans, though, so they can't damage your credit. If they have any rights, they will eventually come knocking.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    Lots of good bits of info in all posts here.

    One theme that recurs is "lien priority" - the HOA lien had some lien position, and the BoA lien had some lien position. Lien priority is based on local laws and rules. If the HOA lien was junior to the BoA lien, then BoA will indeed be able to foreclose at some point. If the HOA lien was senior to the BoA lien, then the BoA lien should have been extinguished at the foreclosure auction when the HOA lien bid happened; my guess is that if BoA's line was going to be wiped, then they would have been there bidding to win. So the first thing to do is identify who is in line ahead of whom - but I expect the HOA lien will be junior to the BoA lien in this case.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y
    Originally posted by Greg Minor:
    Steve, yes I have tried contacting the original owner. Unfortunately he's unwilling to cooperate. ...

    Maybe you need to "pitch" this better. Explain that if you are able to take over the payments, that the loan would get caught up and the former owner would see an improvement in his credit score as a result. He has already lost ownership of the house by failing to uphold his obligations, but he can at least potentially salvage his credit score by cooperating with you taking over the payments. Show him there could be some benefit for him to do this.

    0Reply
  • Mary B.
    Real Estate Investor · Charlotte, NC · Member since 2012 · 8 posts · 0 votes
    14y

    I bought a house in Charlotte at the courthouse once. When you bid at the HOA auction and won, you also bought responsibility for all outstanding loans on the property. Get to the records room at the Register of Deeds office (it's in the courthouse building) and ask them to help you research the deed. They will walk you through how to pull all the paperwork and figure out who is owed. Then you can contact each lender and find out how to proceed. When you get finished there, head upstairs to the liens room where you look for tax (and other) liens which you are also responsible for any that are still outstanding. I'm happy to help you with any questions you have about my experience. If you go to one of the courthouse steps auctions and ask the guys bidding there questions, they are usually pretty helpful at helping you navigate what the process will be.

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y
    Originally posted by Mary B.:
    I bought a house in Charlotte at the courthouse once. When you bid at the HOA auction and won, you also bought responsibility for all outstanding loans on the property. ...

    Good post, if it is intended to be specific to Charlotte or NC - but that doesn't always hold true everywhere.

    0Reply
  • Greg M.
    OP
    Wholesaler · Charlotte, NC · Member since 2012 · 3 posts · 0 votes
    14y

    Mary B., When you bought the house in Charlotte, was it a HOA auction? Also the main problem that I am having is getting BofA to accept my money.They absolutely refuse to give any help!!! I'm at a point where I don't know if we should just give up and move or what.Also I did hear from a rep. at another bank that if BofA didn't send someone to that auction then they may have dropped the ball. How did your experience turn out? It seems that I could maybe learn a trick or two from you if you're willing to share...

    0Reply
  • Mary B.
    Real Estate Investor · Charlotte, NC · Member since 2012 · 8 posts · 0 votes
    14y

    Hi Greg,

    Our property was auctioned by the first mortgage holder. There wasn't an HOA in the neighborhood. I had researched (in that Register of Deeds room) several properties that were to be
    auctioned that day to make sure the titles would be clean and I wouldn't owe anyone else. The mortgage holder that was auctioning the property was the only mortgage holder on our property. This all happened in 2002, so laws could have changed by now. At that time the 2nd mortgage holder was out of luck if the first mortgage holder auctioned off the property. Often the 2nd mortgage holder would show up at the auction and bid. Do you know if BoA held the 1st or 2nd mortgage? Ya know, it's possible that you don't owe anyone else! I sure would love to go to an HOA auction. Where was it? I learned so much by attending the auctions and chatting with the people that knew what they were doing. When I completed the sale, it was at an attorney's office that held a "Trustee's Deed" on the property. I would guess that one of these attorneys that does the trustee deed process would be able to help you in how to proceed. Let me see if I can find the attorney's name. We still live in this house and it worked out to be a great deal and a great house for us.

    0Reply
  • Mary B.
    Real Estate Investor · Charlotte, NC · Member since 2012 · 8 posts · 0 votes
    14y

    Hi Greg,

    I'm on another board for the Charlotte area where I found this thread regarding HOA foreclosure... See what ya think http://www.city-data.com/forum/charlotte/1268256-mecklenburg-homes-owned-hoa-holding-companies.html

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  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    14y

    Lots of assumptions being made in that other forum. The HOA lien may have been purchased before the auction by those holding companies being mentioned there, and then the holding company has the right to foreclose and take the deed. This happens quite a bit, even for bank liens too.

    1Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    14y

    Greg M. I hope you'll post back and clarify so we can help brainstorm. It appears that NC is not a super priority hoa lien state, so you bought the property subject to all the other liens. It sounds like you've been able to bring everything paid off or current except a BofA loan, correct?

    What's the status of the loan? Are they foreclosing? BofA doesn't have to work with you as you are not the borrower. They don't have to work out a payment arrangement or accept any payments from you. However, if you were to go into escrow to sell the property or to refinance it (assuming you qualify for a loan), the BofA will most likely respond to a demand from escrow with a payoff amount.

    What's owed and can you pay it off or get a loan to pay it off? Did your landlord let it go to foreclosure because the property is upside down?

    What is it that you want an attorney to do? I can understand why they say they can't help when they don't understand what the problem is.

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  • Steve Cantano
    Henderson, NV · Member since 2012 · 53 posts · 11 votes
    13y

    Greg M. As an Investor here in Nevada that buys houses All the time at HOA Auctions; my advice to you Would Be THIS. PAY NOTHING NOW! You own the home subject to the BofA Loan. If they don't want to talk to you then you don't want to talk or more importantly PAY them anything until they begin the foreclosure process. For now save your money, Get your credit in order as some others have suggested so that you will have the ability to negotiate a payoff with them when the come to foreclose on the property. The Prior Landlord is a Fool if he wasn't willing to cooperate because at this point YOU Own the house HE Owes the mortgage. You have no responsibility to pay the mortgage. However if you want to own that house & never lose it then You will need to get a real estate Attorney (Not now but later) To sue BofA for not providing you a payoff amount & they will need to address your ownership issue during the foreclosure process. AS I read your original post it doesn't say that the landlord wasn't making his BofA payments it says you were getting notices and so you decided to show up and buy the house! CONGRATULATIONS! YOUR THE OWNER! FOR NOW!! Sit payment and worry free until Bofa Starts the foreclosure process at which point you can contest it and negotiate a payoff as the titled owner. (SAVE YOUR MONEY) You'll need it. If your lucky this landlord of yours that didn't want to cooperate will realize he has a debt that he is liable for and no property as an asset & file for Bankruptcy. That could postpone the foreclosure for a very long time. Good Luck Save Your Money. You Tried To Do the Right Thing Now The Right Thing Is To Live Free Until BofA Decides To Call YOU!

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